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I have a trade in the 50/50 Basket for $JRJC and thought I would give a brief breakdown on the status. Here are the specifics:

September 10/9/7.5/6 Bear Risk Reversal Put Spread. A mouthful lol

I am long stock at $8.07 (hedge for the short Calls)

Here is a breakdown of the September Options pieces:

I am short the $10 Calls
I am long the $9 Puts
I am short the $7.5 Puts (1/2 size)
I am short the $6 Puts (1/2 size)

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Earnings Trade Ideas

I had 3 stocks that I reviewed yesterday for Earnings this morning & here is a look at what I considered:

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Per my “1st week rule” – after monthly Options expiry i don’t do Earnings trades in the 1st week for personal accounts unless the stock has weekly options – I did not do a trade in $DKS or $TJX. I did initiate the trade in $HD.

All 3 trade ideas are performing well with the Bullish side winning in $DKS.

Position Updates

A lot of my focus was on managing existing positions given it was August Options expiration week. However, here are a few newly added that survive to the weekend:

  • $DRC  I am long the September $70 Calls at $1.83
  • $GPRE  I am long the September $45 Calls (the short August pieces went poof)
  • $PEIX  I am long stock with a September 22/21/17 Collar PS
  • $BITA  I am long stock with a September 75/75/65 Collar PS
  • $JCP  I am long the January 2015 $10 Straddle, short the August 29 weekly $9.50 Straddle
  • $RRGB  I am long stock at $49.90 and short the September $50 Straddle for a $5.35 credit

Exits this week:

Submarine Basket (no material changes):

50/50 Basket:

Earnings:

Here is the Summary:

Positions_08162014

Different ways to participate

I have been trading $ICPT this week (was a recent 50/50 Basket member as well) and found myself today evaluating my short stock trade as it approached the $300 level. I often will use a Bear Collar to protect a short stock position but decided to take a different path to participate in the “fade”.

This is the path I chose:

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I covered the short stock piece (frees up a lot of margin) & switched to a long August 290/265 Put Spread (just under a $5 cost, debit). A solid 5:1 risk reward.

An Earnings Trade in Fossil

I am a big fan of Option Ratio trades for a variety of reasons (like low-cost, flexibility on exit, etc) and I did such a trade in $FOSL today for Earnings. First, a look at the specifics:

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Let me break this down:

I am long the August $102 Puts
I am short the $97 & $93 Puts
I am short the $111 Calls
This trade was done for EVEN
This trade takes margin (at least until the upper & lower short pieces are closed)

Another way to look at this trade structure:

I am long the August 102/97 Put Spread
I am short the August 111/93 Strangle

In after hours price is at $99 so the Put Spread piece is in play (capped at $5)

Earnings Trades – a Simple Approach

part of the Simple Approach series

One way to keep it simple for Earnings trades is to use Options. Pick a bias – bullish or bearish – and buy the appropriate Call(s) or Put(s).

I track trade ideas each week – whether I do a trade or not – and this data collection includes several different trade strategies. The purpose of this is to have data I can review later including strategy comparisons.

For this afternoon, here are 5 stocks that reported Earnings. I would approach this as a “Basket of stocks” and would have taken a Bullish stance on all 5. Here are my super deluxe notes:

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One additional stock I would add is $SCTY – buying the August 08 weekly $76 Calls (closed at $2.80 today).

Earnings trade idea on Barnes & Noble

a Look Both Ways approach

Ticker: $BKS

Long July 21/22/23 1×2 Split Call Ratio
Long July 20/19/18 1×2 Split Put Ratio
Trade cost right now: $.16 debit
Takes margin

As always, you will need to be prepared to hedge with stock if price flirts with the $18 or $23 level. This trade will be capped at a $1 profit (minus trade cost) if price moves past $19 or $22.

The Basket of stocks

I discuss frequently the various baskets of stocks that I manage & often get questions regarding them so I thought I would give a brief list here:

Earnings
This basket of stocks is for trades related to Earnings reports each quarter. These can be pre & post Earnings trades

Submarine Basket
I buy pullbacks in this basket & prefer stocks with Options. I often buy partial position & then sell Straddles/Strangles to build the position

Fab 5
I buy stocks (sometimes use only Options but rare) that are headed to test the $100 level

50/50
I short stocks that are 50% above the 50 SMA

an Earnings trade idea for Adobe

Earnings after the market close on 06/17

Trade Idea:

Long the June 67.5/70/72.5 1×2 Split Call Ratio
Short the June 62.5 Puts
Trade cost .06 right now
Trade takes margin until Friday (or until naked short pieces are closed)

You must be comfortable owning stock at $62.56

Note: to help with the breakdown of this trade idea, here is another way to view the strategy:

Long June 67.5/70 CS
Short June 72.5/62.5 Strangle

using RSI as a Buy/Sell signal

part of the Simple Approach series

One of the Earnings reports this past week was in $PVH Corp. The reaction was negative and it ended the week unable to overtake the $120 level. For those traders with no position, consider this Daily chart:

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Above you can see that RSI is probing the key 30 level. Notice what happened to price the past 2 times it probed this level. Using RSI as a Buy signal it looks like a spot to initiate a new long position. Use your own Stop setting according to your process.